Promise of $3bn Saudi investment on table as Salman lands in Moscow

Russia and Saudi Arabia are expected to announce the launch of two $1bn investment funds this week – one focussing on technology and the other on energy – after King Salman bin Abdulaziz flew in to Moscow today for the first ever visit to the country by a Saudi monarch. Officials are also expected to sign a series of other deals worth a further $1bn that would see Saudi Arabia investing $200m in Russia’s toll roads, and the Russian petrochemical company Sibur exploring opportunities in the Gulf. Several unnamed Saudi companies are also believed to be in talks about the possibility of investing in an LNG project currently being developed in the Arctic by Russia’s Novatek, while Saudi Aramco and Gazprom Neft are said to be in talks about setting up a joint research and technology centre. The two countries will additionally be seeking areas of synergy in other related areas including desalination and energy efficiency in air condition systems, according to Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF) and predicted that Russia’s largest technology company Yandex would also play a part in future cooperation between Moscow and Riyadh.“Yandex is an interesting company for us because it is already present in the Middle East and Turkey and it has a search engine that is more popular than Google in the Russian market by a long way,” he said. Saudi Arabia’s main sovereign wealth fund, the Public Investment Fund, has already invested in the SoftBank Vision Fund, a technology-focused private equity fund established with a Japanese company and other investors. The King’s visit to Moscow is laden with political significance. While Russia needs Saudi’s petrodollars to boost its economy, the Saudis will be using their financial muscle to loosen Moscow’s ties with Iran and to establish Russia as a counterweight to the US.